Question 1

An increase in the capital stock would be expected to

Accepted Answer

A)  decrease the labor force. 
B)  increase the level of output. 
C)  decrease real GDP per capita. 
D)  increase real GDP per capita. 
A)  decrease the labor force. 
B)  increase the level of output. 
C)  decrease real GDP per capita. 
D)  increase real GDP per capita.

Question 2

Discouraged workers are included in the

Accepted Answer

A)  labor force category. 
B)  unemployed category. 
C)  not in the labor force category. 
D)  employed category. 
A)  labor force category. 
B)  unemployed category. 
C)  not in the labor force category. 
D)  employed category.

Question 3

During the course of the twentieth century,the average workweek in the United States has gotten shorter and Americans have enjoyed greater amounts of leisure time.How has this development affected potential GDP and labor productivity?

Accepted Answer

Decreasing the length of the workweek,ot

Question 4

The shortfall between actual real GDP and potential GDP

Accepted Answer

A)  decreases as the unemployment rate rises. 
B)  increases as the unemployment rate rises. 
C)  increases as the employment rate rises. 
D)  decreases as the labor force increases. 
A)  decreases as the unemployment rate rises. 
B)  increases as the unemployment rate rises. 
C)  increases as the employment rate rises. 
D)  decreases as the labor force increases.

Question 5

If the nominal interest rate was 12 percent and the inflation rate was 10 percent in 1980,while the nominal interest rate was 7 percent and the inflation rate was 2 percent in 2001,then

Accepted Answer

A)  real rates were higher in 2001. 
B)  real rates were higher in 1980. 
C)  credit was more expensive in 1980. 
D)  credit was cheaper in 2001 because the nominal rate was lower. 
A)  real rates were higher in 2001. 
B)  real rates were higher in 1980. 
C)  credit was more expensive in 1980. 
D)  credit was cheaper in 2001 because the nominal rate was lower.

Question 6

Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable.This represents a confusion of

Accepted Answer

A)  actual and expected inflation. 
B)  real versus nominal inflation. 
C)  real versus expected mortgage payments. 
D)  real versus nominal interest rates. 
A)  actual and expected inflation. 
B)  real versus nominal inflation. 
C)  real versus expected mortgage payments. 
D)  real versus nominal interest rates.

Question 7

Inflation is a very minor problem for lenders because it is relatively easy to estimate future rates of inflation.

Accepted Answer

A) True 
 B)False

Question 8

Variable inflation rates may be more costly socially than low but predictable rates of inflation.

Accepted Answer

A) True 
 B)False

Question 9

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period,prices have risen by 4 percent.

Accepted Answer

A)  Purchasing power has been redistributed to Rachel. 
B)  No purchasing power has been redistributed. 
C)  Purchasing power has been redistributed to Phoebe. 
D)  Both Rachel and Phoebe received extra purchasing power. 
A)  Purchasing power has been redistributed to Rachel. 
B)  No purchasing power has been redistributed. 
C)  Purchasing power has been redistributed to Phoebe. 
D)  Both Rachel and Phoebe received extra purchasing power.

Question 10

The German inflation rate after World War I was measured in the thousands of percents.This condition is referred to as

Accepted Answer

A)  fundamental inflation. 
B)  environmental inflation. 
C)  hyperinflation. 
D)  episodic inflation. 
A)  fundamental inflation. 
B)  environmental inflation. 
C)  hyperinflation. 
D)  episodic inflation.

Question 11

High unemployment is socially wasteful.Why?

Accepted Answer

High unemployment is socially wasteful.W

Question 12

Economic growth is most likely to solve the problems of

Accepted Answer

A)  environmental pollution. 
B)  world poverty. 
C)  emotional stress. 
D)  social alienation. 
A)  environmental pollution. 
B)  world poverty. 
C)  emotional stress. 
D)  social alienation.

Question 13

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

Accepted Answer

A) True 
 B)False

Question 14

The distinction between real and nominal rates of interest is understood by

Accepted Answer

A)  most public policy makers. 
B)  the majority of the American population. 
C)  a majority of legislators. 
D)  relatively few Americans. 
A)  most public policy makers. 
B)  the majority of the American population. 
C)  a majority of legislators. 
D)  relatively few Americans.

Question 15

The difference between the purchase price of a financial asset and the sale price of the asset is called a(n)

Accepted Answer

A)  capital gain. 
B)  dividend. 
C)  profit. 
D)  investment. 
A)  capital gain. 
B)  dividend. 
C)  profit. 
D)  investment.

Question 16

Small differences in economic growth rates translate into significant differences in living standards.

Accepted Answer

A) True 
 B)False

Question 17

Economists and psychologists are often on opposite sides of the economic growth debate.The nature of the debate is such that

Accepted Answer

A)  economists emphasize the benefits of growth to finance valuable programs, and psychologists question whether more goods make people happier. 
B)  economists emphasize that more money means more income for the government, and psychologists believe poorer people are happier. 
C)  economists believe that economic growth imposes no serious costs on the economy, and psychologists question the statistical reliability of GDP numbers. 
D)  economists stress the importance of money relative to leisure, and psychologists stress the importance of an unstructured life. 
A)  economists emphasize the benefits of growth to finance valuable programs, and psychologists question whether more goods make people happier. 
B)  economists emphasize that more money means more income for the government, and psychologists believe poorer people are happier. 
C)  economists believe that economic growth imposes no serious costs on the economy, and psychologists question the statistical reliability of GDP numbers. 
D)  economists stress the importance of money relative to leisure, and psychologists stress the importance of an unstructured life.

Question 18

Economists feel that taxing nominal capital gains imposes costs on the economy due to

Accepted Answer

A)  increased consumption. 
B)  reduced consumption. 
C)  increased investment. 
D)  reduced investment. 
A)  increased consumption. 
B)  reduced consumption. 
C)  increased investment. 
D)  reduced investment.

Question 19

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

Accepted Answer

A)  worse off due to higher price levels. 
B)  worse off due to higher rates of unemployment in the 1990s. 
C)  better off due to unemployment insurance. 
D)  better off due to lower price levels. 
A)  worse off due to higher price levels. 
B)  worse off due to higher rates of unemployment in the 1990s. 
C)  better off due to unemployment insurance. 
D)  better off due to lower price levels.

Question 20

As the unemployment rate rises,

Accepted Answer

A)  real GDP also rises. 
B)  nominal GDP rises. 
C)  the employment rate rises. 
D)  lost national output rises. 
A)  real GDP also rises. 
B)  nominal GDP rises. 
C)  the employment rate rises. 
D)  lost national output rises.

An increase in the capital stock would be expected to

Discouraged workers are included in the

During the course of the twentieth century,the average workweek in the United States has gotten shorter and Americans have enjoyed greater amounts of leisure time.How has this development affected potential GDP and labor productivity?

The shortfall between actual real GDP and potential GDP

If the nominal interest rate was 12 percent and the inflation rate was 10 percent in 1980,while the nominal interest rate was 7 percent and the inflation rate was 2 percent in 2001,then

Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable.This represents a confusion of

Inflation is a very minor problem for lenders because it is relatively easy to estimate future rates of inflation.

Variable inflation rates may be more costly socially than low but predictable rates of inflation.

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period,prices have risen by 4 percent.

The German inflation rate after World War I was measured in the thousands of percents.This condition is referred to as

High unemployment is socially wasteful.Why?

Economic growth is most likely to solve the problems of

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

The distinction between real and nominal rates of interest is understood by

The difference between the purchase price of a financial asset and the sale price of the asset is called a(n)

Small differences in economic growth rates translate into significant differences in living standards.

Economists and psychologists are often on opposite sides of the economic growth debate.The nature of the debate is such that

Economists feel that taxing nominal capital gains imposes costs on the economy due to

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

As the unemployment rate rises,

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 6: The Goals of Macroeconomic Policy

An increase in the capital stock would be expected to

Discouraged workers are included in the

During the course of the twentieth century,the average workweek in the United States has gotten shorter and Americans have enjoyed greater amounts of leisure time.How has this development affected potential GDP and labor productivity?

The shortfall between actual real GDP and potential GDP

If the nominal interest rate was 12 percent and the inflation rate was 10 percent in 1980,while the nominal interest rate was 7 percent and the inflation rate was 2 percent in 2001,then

Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable.This represents a confusion of

Inflation is a very minor problem for lenders because it is relatively easy to estimate future rates of inflation.

Variable inflation rates may be more costly socially than low but predictable rates of inflation.

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period,prices have risen by 4 percent.

The German inflation rate after World War I was measured in the thousands of percents.This condition is referred to as

High unemployment is socially wasteful.Why?

Economic growth is most likely to solve the problems of

The nominal rate of interest is the difference between the real rate and the expected rate of inflation.

The distinction between real and nominal rates of interest is understood by

The difference between the purchase price of a financial asset and the sale price of the asset is called a(n)

Small differences in economic growth rates translate into significant differences in living standards.

Economists and psychologists are often on opposite sides of the economic growth debate.The nature of the debate is such that

Economists feel that taxing nominal capital gains imposes costs on the economy due to

Compared to the unemployed during the Great Depression,persons unemployed in today's economy are

As the unemployment rate rises,

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters